News and Comment

Employee-owned mutuals: the most pressing issues

Monday 28 February 2011

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The Social Enterprise Coalition Right to Run event last week was an opportunity for public sector employees to get practical support around creating new social enterprises and mutuals. OPM’s chief executive Hilary Thompson led one of the workshops and writes here about the issues raised by participants.

My workshop focused on the employee ownership model specifically, and attracted a lot of participants with a real thirst for understanding the options and key choices. Attendees were from a range of different public services and were mostly at the stage of finding out more about the potential journey. There was strong interest in:

  • How to combine employee ownership with a strong social purpose.
  • The benefits that employee ownership can bring, how these balance against perceived risks in moving out of the public sector and how to achieve longer term success.
  • Transferring employment terms and conditions (and the extent to which the TUPE regulations are an issue or barrier).
  • How to engage with decision-makers in the ‘parent’ body or with commissioners, who are often both new to the right to run agenda themselves and also preoccupied with other priorities like implementing budget reductions.

EOA case studies and OPM’s own research (for example our report Shared ownership in practice, and the case studies of five public service mutuals) provide examples of how different services have achieved a positive transition. But local negotiation is always important, so whenever working with leaders of potential mutuals we encourage them to identify key stakeholders and decision-makers and to open informal discussions with them as early as possible.

In relation to the points in the list above, Government policies are of course critical in shaping the appetite of public service professionals for change. Some specific new policies are emerging – for example on contracting with the public sector and, according to media stories, on transferring public sector pensions – but it’s the overall balance of policies that matters. The imminent public service reform white paper will help to fill in the some of the gaps in the current picture.